Former Federal Reserve Chair Janet Yellen is accusing President Donald Trump of being ignorant when it comes to macroeconomics and the central bank’s mission, according to an interview with Marketplace published Monday.
“Do you think the president has a grasp of macroeconomic policy?” Marketplace’s Kai Ryssdal asked Yellen.
“No, I do not,” she replied.
Trump, who did not offer Yellen a second term as Fed chief, has repeatedly railed against the central bank for raising interest rates, rankling critics who say the president should respect the Fed’s independence. Trump has also attacked U.S. trade partnerships as unfair, and has waged a tariff war against China, to the economic detriment of some of his most ardent supporters in the farming and manufacturing communities.
Yellen said that though she finds the country’s economy to be largely healthy, she is concerned Trump has little understanding of basic macroeconomics or even what the Federal Reserve is mandated by Congress to do.
“I doubt that he would even be able to say that the Fed’s goals are maximum employment and price stability, which is the goals that Congress have assigned to the Fed,” Yellen, who was replaced by Jerome Powell last year, said in the Marketplace interview. “He’s made comments about the Fed having an exchange rate objective in order to support his trade plans, or possibly targeting the U.S. balance of trade. And, you know, I think comments like that shows a lack of understanding of the impact of the Fed on the economy, and appropriate policy goals.”
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